Demonstrators are protesting outside Newbridge Credit Union today following the news that it is being taken over by Permanent TSB.

As part of the move, that the credit union's 32,000 deposit accounts as well as 7,000 loan accounts will be transferred to the bank.

The protest is being held by Newbridge Credit Union Action Group who oppose the move.

Last night the Central Bank was dramatically granted permission to force the credit union to be taken over by Permanent TSB.

In a hastily arranged High Court hearing late last night, the Central Bank used emergency banking legislation to seek approval for the take-over by the bank of the credit union in a move that will mean €54m of taxpayers money being pumped into it.

It is understood the €54m will be injected into Newbridge Credit Union to boost its reserves before Permanent TSB executives can move in.

Willie Crowley, Chairman of Newbridge Credit Union Action Group pictured during a protest outside Newbridge Credit Union this morning. Photo: Frank Mc GrathWillie Crowley, Chairman of Newbridge Credit Union Action Group pictured during a protest outside Newbridge Credit Union this morning.Evonne Boland pictured with her two and a half year old son Tiago at the Newbridge Credit Union Action Group a protest outside Newbridge Credit Union this morning.Majella O Hanlon from Newbridge, pictured outside Newbridge Credit Union . Majella's Father was one of the founders of Newbridge Credit unionThe High Court granted the application by the Central Bank last nightThe offices of Newbridge Credit UnionPermanent TSB on St. Stephens Green yesterday

SIPTU members in Newbridge Credit Union will meet tonight, they said today.

SIPTU Organiser, Adrian Kane, said that the credit union employees had not been told about the transfer and he added that retaining jobs would be a priority.

“There was no communication from the special manager of Newbridge Credit Union or from the Central Bank with staff or their representatives prior to the transfer to the Permanent TSB last night."

"We will be hopeful that Newbridge Credit Union can retain its autonomy within the Permanent TSB structure with a view to it being re-established as a normal credit union.........,” he said.

The transfer move had been fiercely resisted by barristers for the Save Newbridge Credit Union Action Group.

At the special sitting of the High Court, senior counsel Paul Gallagher, who appeared for the Central Bank, told the High Court the transfer application was being made as a "matter of urgency".

"The urgency is that this order be made before the credit union opens for business at 9.30am for fear of a run on the credit union and a completely disorderly crisis that would arise as a result.

"A problem in credit unions could cause confidence issues and contagion across the sector."

Mr Gallagher said the bank has also considered whether the failure of the credit union would be "likely to contribute to instability in the banking system or serious damage to the financial system in our economy in the State.

"The bank considers that there remains a real risk that the failure of NCU could lead to contagion in the credit unions sector, which would contribute instability in the banking sector," he warned.

He said it could give "rise to instability in respect of the general banking sector".

Mr Justice Eamon de Valera said he had "no problem" granting the order, with "transfer" the preferred option.

It was the culmination of a day of drama as the Central Bank made the unprecedented move of attempting the transfer of a credit union's loans and savings into a bank.

This is the first-ever move to get a bank to take ownership of a credit union. Credit unions are owned and controlled by their members.

It is sure to spread fear among the 2.8 million people who are members of 392 credit unions in the State that other struggling credit unions will now be forcibly taken over by banks.

The Central Bank stressed that members' money is safe. Savings in credit unions are state-guaranteed up to €100,000, it said.

DRAMATIC

But it successfully cited emergency legislation – originally put in place to close a bank or financial institution that threatens the financial viability of the State – to convince a High Court judge to back the "transfer order".

The dramatic shutdown of the credit union was opposed in the late-night sitting of the court by senior counsel Cian Ferriter, on behalf of the Save Newbridge CU Action Group.

It was expected that the legal battle would ultimately play out in the High Court later this week – but things moved quickly amid fears of a massive flight of deposits from the credit union, after it leaked out that the State-rescued bank is to take it over.

The levels of withdrawals began to increase at the end of July, with an average of €76,000 taken out by concerned members every day. It was claimed that there would be a run on Newbridge Credit Union unless mechanisms were put in place to allow its operation to be assumed by Permanent TSB.

It is understood the Exchequer will now be forced to inject €54m into Newbridge Credit Union to boost its reserves before Permanent TSB executives can move in.

But even if the Central Bank succeeds in its bid, the offices of Newbridge Credit Union will remain open, and there will be no restriction on people withdrawing their savings.

The 36 staff will become Permanent TSB employees. The bank will appeal today for credit union borrowers to continue to repay their loans.

Permanent TSB will eventually merge its branch in the town with the credit union.

Members of the Kildare credit union will retain the same terms and conditions on existing savings and loans, but will now be dealing with a bank. This will mean that any future loans will be borrowings from a bank.

In a statement, the Central Bank said: "The transfer was required due to the financial difficulties at Newbridge Credit Union and following a decision of Naas Credit Union not to proceed with its proposed combination with Newbridge.

"The transfer ensures members' savings are protected and that no member has lost money. All services, including deposit and lending facilities continue to be available to all members from the credit union premises, which will open as normal.

"The Central Bank's priority at all times is the protection of members' savings and the maintenance of the financial stability and well-being of credit unions generally, in line with the bank's mandate."

In addition, Permanent TSB said that the transfer of Newbridge Credit Union’s deposits and loans to it would require no action from its members.

It added: "Applications for new loans and deposit accounts will continue to be accepted from Newbridge Credit Union members."

The Co Kildare lender, the largest community-based credit union in the country with 37,000 members, has been controlled by a court-appointed special manager for almost two years now after concerns over it finances.

The appointment of Luke Charleton of Ernst & Young as special manager of Newbridge Credit Union in January last year is set to cost €2m. He has now been replaced by Permanent TSB.

A courts gagging order had been placed on directors, and former directors, of Newbridge Credit Union at the request of the Central Bank.

The last official accounts for Newbridge Credit Union showed there was €163m in member savings in 2010. Loans totalled €140m.

The Newbridge Credit Union Action Group, which has been campaigning to keep the lender independent, has reiterated its determination to fight the shutdown. It said it will now be calling on people to boycott politicians from the Government parties of Fine Gael and Labour who are standing in the local elections in May.

INDEPENDENCE

The group presented an alternative plan to the Central Bank in the past few days that, if implemented, would retain the independence of the lender.

Chairman of Save Newbridge Credit Union Action Group Willie Crowley said his group would fight what he described as a "conspiracy" to shut the credit union by regulators.

The Irish League of Credit Unions (ILCU) said it is "business as usual" for credit unions, and "savings as always are secure".

A spokeswoman said Newbridge Credit Union was not affiliated to the ILCU and they could not comment on what was happening with that facility.

"In relation to our affiliated credit unions, members' savings are safe and protected under the Government's deposit guarantee scheme of up to €100,000 per member," she said.